Project A

initial cost$=$$$100,000$

net cash flow$($$$)$

year $1-$$$10,000$

year $2-$ $$25,000$

year $3-$$$25,000$

year $4-$ $$30,000$

year $5-$$$30,000$

year $6-$$$15,000$

year $7-$$$10,000$

At the end of year $7,$the equipment will be soldforr an estimated $$5,000$

project B

initial cost $=$$$100,000$

cash flow benefits $($$$)$

year $1-$$$30,000$

year $2-$$$25,000$

year $3-$$$20,000$

year $4-$$$20,000$

year $5-$$$20,000$

year $6-$$$15,000$

year $7-$$$10,000$

The equipment will have no value at the end of it's $7$ year life.

i$)$ calculate the net present value for each project using both an $8\%$ and $12\%$ discount factor.

ii$)$ calculate $($showingyour workings$)$the internal rate of return for each project